Chapter 15 Key Terms

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Flashcards on Chapter 15 Key Terms, created by Megan Hooper on 27/07/2017.
Megan Hooper
Flashcards by Megan Hooper, updated more than 1 year ago
Megan Hooper
Created by Megan Hooper about 7 years ago
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Adjustable Rate Mortgage (ARM) Rate of mortgage is lower than a fixed rate mortgage. Rates adjusted without refinancing. Caps available to limit how high rate can go for each adjustment period over term of loan.
Amortization Schedule Shows monthly payment to pay back loan at maturity. Payment also includes interest. Note payment is fixed at same amount each month.
Amortization Table A table that shows each periodic payment on a loan or mortgage.
Biweekly Mortgage Mortgage payments made every 2 weeks rather than monthly. This payment method takes years off the life of the mortgage and substantially reduces the cost of interest.
Closing Costs Costs incurred when property passes from seller to buyer such as for credit reports, recording costs, points, and so on.
Escrow Account Lending institution requires that each month 1/12 of the insurance cost and real estate taxes be kept in a special account.
Fixed Rate Mortgage Monthly payment fixed over number of years, usually 30 years.
Foreclosure Graduated-Payment Mortgages (GPM) Borrower pays less at beginning of mortgage. As years go on, the payments increase.
Home Equity Loan Cheap and readily accessible lines of credit backed by equity in your home; tax-deductible; rates can be locked in.
Interest-Only Mortgage Type of mortgage where in early years only interest payment is required.
Monthly Payment Amount paid each period to pay off part of the mortgage.
Mortgages Cost of home less down payment.
Points Percentage(s) of mortgage that represents an additional cost of borrowing. It is a one-time payment made at closing.
Reverse Mortgage Federal Housing Administration makes it possible for older homeowners to live in their homes and get cash or monthly income.
Short Sale A real estate sale when amount received is less than balance of the debt.
Subprime Loans A loan with a rate higher than prime due to uncertainty of payment.
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